Critical Illness Insurance Are Your Children Insured

Critical Illness Insurance Are Your Children Insured

Critical Illness Insurance .​
Are Your Children Insured?
Cover for your children is​ the​ most undervalued aspect of​ critical illness insurance .​
But as​ most policies automatically provide the​ cover as​ a​ free extra,​ we suspect that some policyholders don't even know they've got it!
Most policies automatically insure your children albeit at​ a​ lower level of​ benefits than the​ main policyholders cover .​
But this cover is​ invaluable,​ especially if​ your child becomes critically ill and you​ need to​ take time off work to​ provide care.
Critical Illness insurance pays out a​ tax free capital sum if​ the​ policyholder,​ or​ one of​ their children,​ suffers one of​ the​ very serious illnesses scheduled on​ their policy .​
The only rider is​ that the​ claimant must survive at​ least 28 days after the​ diagnosis.
Scottish Provident,​ one of​ the​ UK's largest critical illness insurers has announced that claims for children is​ now its fourth-largest cause for a​ claim .​
Says Nick Kirwan,​ their Protection Marketing Director,​ Work takes a​ back seat when your child becomes ill .​
You may need to​ cut your working hours or​ even stop working altogether.
If your critical illness policy does insure your children,​ then a​ payout from the​ policy gives you​ the​ financial flexibility to​ do just that .​
So how much will they pay out?
Most insurers will pay a​ proportion of​ total insured value if​ a​ child becomes critically ill .​
For example,​ Norwich Union will pay out 50% of​ the​ insured sum or​ £10,​000 whichever is​ the​ lower – and this cover includes adopted children and step children .​
Standard Life and Legal & General also pay up to​ 50% with Standard setting the​ maximum payout at​ £25,​000 and in​ L&G's case it's £15,​000.
Cover never starts as​ soon as​ the​ child is​ born .​
With some policies cover starts up at​ 3 months but others wait as​ long as​ three years .​
Ideally,​ you​ want cover to​ start as​ early as​ possible.
Another other point to​ understand is​ that if​ the​ main policyholder has a​ claim,​ then the​ policy pays out and terminates – they can't claim more than once .​
But if​ there is​ a​ claim for a​ child,​ the​ policy does not terminate – the​ cover for the​ policyholders continues unaffected .​
And if​ you​ start or​ add to​ your family after you've started the​ policy there's no need to​ inform the​ insurer as​ the​ cover automatically covers all your children.
But not all insurers will insure your children .​
Neither the​ Halifax,​ National Westminster nor Nationwide Life include any cover for children .​
So if​ you​ have or​ intend to​ have a​ family,​ it's vital that you​ tell your adviser and then he or​ she will ensure your policy includes the​ necessary cover.
And that brings us to​ the​ topic of​ professional advice .​
You can buy Critical Illness insurance online all by yourself but honestly it​ isn't worth the​ risk .​
In our experience over 50 % of​ DIY buyers don't get it​ exactly right .​
There is​ little standardisation within critical illness insurance so you're unlikely to​ get your ideal policy if​ you​ buy on​ price alone .​
It's one of​ those situations where a​ low price can turn out to​ be a​ costly mistake!
In order to​ get the​ ideal policy your adviser need to​ understand how much you​ can afford and what aspects of​ cover are most important to​ you​ .​
It's then a​ matter of​ using experience and product knowledge to​ find the​ best options .​
If this sounds like a​ receipt of​ throwing your discounts down the​ drain,​ it​ isn't.
Very few high street brokers will give you​ any discount but shop online with one of​ the​ specialist critical illness brokers and you'll get full service and a​ discount.
How do you​ find them? Well actually,​ it's really easy .​
Just type in​ Critical illness insurance into your favourite search engine - but ignore the​ web sites run by the​ insurers themselves – they just offer you​ their own policies and you​ really need a​ broker who can consider the​ whole market.

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